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Stuart Taylor says Card-check will deny employees free choice.
I don’t know whether it would be good for employees, or for the country, if millions more were unionized, as will eventually occur if Congress passes the Obama-backed Employee Free Choice Act, now the subject of a titanic lobbying battle focused on a handful of moderate senators.
I am pretty sure that it has become unduly hard for workers to embrace collective bargaining if they choose, in part because the penalties for employers who fire and intimidate pro-union employees and stall unionization elections are too weak to deter such misconduct.
But I am very sure that the radical changes that the proposed law would make in long-established labor laws are overkill. The most publicized “card-check” provision would essentially end use of the secret-ballot elections that have been required (at the option of employers) for more than 60 years to determine whether a majority of employees want to unionize their workplaces. Even more alarming to some employers is another provision that would empower government arbitrators to dictate contractual terms when unions and management cannot agree.
These measures are not necessary to remedy the employer abuses of which unions complain. They would probably be bad for employees and employers alike, and they might kill countless jobs at a time when unemployment is already soaring. …
Washington spends more and more on education. National Review says most is wasted.
In his first address to Congress, President Obama called it every American’s patriotic duty to enroll in post-secondary education, repeating the thesis, long discredited by careful research, that maximizing university attendance creates large economic benefits. “That,” the president said, “is why we will provide the support necessary for you to complete college and meet a new goal: By 2020, America will once again have the highest proportion of college graduates in the world.”
While challenging young people to achieve their potential is praiseworthy, the president is mistaken on two important points. First, the goal of leading the world in college graduation is neither achievable (because of our demographics) nor particularly worthwhile. Far greater economic and social benefits would accrue from boosting high-school graduation and encouraging hands-on vocational and technical training. Second, spending tens of billions of additional federal dollars on grants, loans, and tax credits is unlikely to boost college graduation much anyway — though it may well boost attendance, and thus revenue for the colleges.
The Obama administration is certainly committed to the spending part. …
… Much of this agenda is deeply misguided. Unfortunately, much of it is also popular. Millions of Americans are either saddled with big student debts, struggling to pay tuition for current college students, or worried that they won’t be able to afford the tuition when their younger children grow up. Many will welcome another political promise that help is on the way — but when universities raise their prices again to capture most of the new federal aid, these voters won’t know to blame Obama and the Democratic Congress. …
We have a piece from Forbes Magazine about the collapse of Harvard’s endowment. What is surreal about this, is they are months away from knowing what the endowment has really lost. That is some serious sophistication; financial instruments that cannot be priced.
Stocks were tumbling last fall as the new school year began, but at Harvard University it was as if the boom had never ended. Workers were digging across the river from Harvard’s Cambridge, Mass. home, the start of a grand expansion that was to eventually almost double the size of the university. Budgets were plump, and students from middle-class families were getting big tuition breaks under an ambitious new financial aid program. The lavish spending was made possible by the earnings from Harvard’s $36.9 billion endowment, the world’s largest. That pot was supposed to be good for $1.4 billion in annual earnings.
Behind the scenes, though, a different story was unfolding. In a glassed-walled conference room overlooking downtown Boston, traders at Harvard Management Co., the subsidiary that invests the school’s money, were fielding questions from their new boss, Jane Mendillo, about exotic financial instruments that were suddenly backfiring. Harvard had derivatives that gave it exposure to $7.2 billion in commodities and foreign stocks. With prices of both crashing, the university was getting margin calls–demands from counterparties (among them, JPMorgan Chase and Goldman Sachs) for more collateral. Another bunch of derivatives burdened Harvard with a multibillion-dollar bet on interest rates that went against it.
It would have been nice to have cash on hand to meet margin calls, but Harvard had next to none. That was because these supremely self-confident money managers were more than fully invested. As of June 30 they had, thanks to the fancy derivatives, a 105% long position in risky assets. The effect is akin to putting every last dollar of your portfolio to work and then borrowing another 5% to buy more stocks.
Desperate for cash, Harvard Management went to outside money managers begging for a return of money it had expected to keep parked away for a long time. It tried to sell off illiquid stakes in private equity partnerships but couldn’t get a decent price. It unloaded two-thirds of a $2.9 billion stock portfolio into a falling market. And now, in the last phase of the cash-raising panic, the university is borrowing money, much like a homeowner who takes out a second mortgage in order to pay off credit card bills. …
Speaking of ephemeral assets, Hernando De Soto has some suggestions how we can prevent creation of toxic assets next time.
The Obama administration has finally come up with a plan to deal with the real cause of the credit crunch: the infamous “toxic assets” on bank balance sheets that have scared off investors and borrowers, clogging credit markets around the world. But if Treasury Secretary Timothy Geithner hopes to prevent a repeat of this global economic crisis, his rescue plan must recognize that the real problem is not the bad loans, but the debasement of the paper they are printed on.
Today’s global crisis — a loss on paper of more than $50 trillion in stocks, real estate, commodities and operational earnings within 15 months — cannot be explained only by the default on a meager 7% of subprime mortgages (worth probably no more than $1 trillion) that triggered it. The real villain is the lack of trust in the paper on which they — and all other assets — are printed. If we don’t restore trust in paper, the next default — on credit cards or student loans — will trigger another collapse in paper and bring the world economy to its knees.
If you think about it, everything of value we own travels on property paper. At the beginning of the decade there was about $100 trillion worth of property paper representing tangible goods such as land, buildings, and patents world-wide, and some $170 trillion representing ownership over such semiliquid assets as mortgages, stocks and bonds. Since then, however, aggressive financiers have manufactured what the Bank for International Settlements estimates to be $1 quadrillion worth of new derivatives (mortgage-backed securities, collateralized debt obligations, and credit default swaps) that have flooded the market.
These derivatives are the root of the credit crunch. Why? Unlike all other property paper, derivatives are not required by law to be recorded, continually tracked and tied to the assets they represent. Nobody knows precisely how many there are, where they are, and who is finally accountable for them. …
In the trench war of the American Episcopal Church, Fred Barnes is a foot soldier. He reflects on it for the WSJ.
In 2007, my wife Barbara and I left The Falls Church, which we had happily attended from the time we became Christians a quarter-century ago. It’s a 277-year-old church in northern Virginia well-known for its popular preacher, the Rev. John Yates, its adherence to traditional biblical teachings and its withdrawal in 2005 from the national Episcopal church. Our three grown daughters and their families stayed behind at The Falls Church.
We didn’t leave in anger. We didn’t have political or theological anxieties. Rather, we left for a new church because our old church wanted us to. The Falls Church has become entrepreneurial as well as evangelical. It’s in the church-planting business. And we were encouraged by Mr. Yates to join Christ the King, the church “planted” near our home in Alexandria. We were a bit ambivalent about the move, but when Christ the King opened its doors in September 2007, we were there. ..
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